Maryland lawmakers eye tripling R&D tax credit

Measure died in House last year

Legislation that would triple funding for the state’s research and development tax credit program — a key issue for Maryland business leaders — has returned in both the House and Senate.

Similar legislation died in the House last session after passing the Senate, 46-0.

The bill got caught up with budget talks during the late hours of the session last year, said Gene Burner, president of the Manufacturers’ Alliance of Maryland, a coalition of manufacturing companies that operate in the state. He said the measure should have a better chance of approval in the 2013 session.

“I think it will get a better look by the House this time,” Burns said. “It has a good shot this year to pass.”

HB386 and SB203 would increase the maximum amount of research and development tax credits that may be granted annually from $6 million to $18 million. It also would allow a refundable credit for small businesses, which would help those companies that don’t yet have income.

The program has been dominated by large businesses, according to a legislative analysis. Having more funds available would spread the funding to smaller businesses, as would the refundable credit, Burner said.

Brian Levine, vice president of government relations for the Tech Council of Maryland, added that his trade group strongly supports the bill.

“Improving the research and development tax credit is the top priority in our legislative policy platform,” he said.

The refundable credit would help many biotechs as they are developing, Levine said.

The current cap has not been increased since the program was created in 2000, while Pennsylvania has more than tripled its program funding to $55 million since then, according to a legislative analysis.

Hearings are set for 1 p.m. Feb. 13 in the Senate Budget and Taxation Committee and 1 p.m. Feb. 26 in the House Ways and Means Committee.

Minimum wage hike proposal gaining support

Senate Majority Leader Robert J. Garagiola (D-Dist. 15) of Germantown and Del. Aisha N. Braveboy (D-Dist. 25) of Mitchellville said Thursday during a conference call with the media that legislation they plan to file to raise the state’s minimum wage has already gained more support than similar measures had in previous years.

The planned legislation would raise the minimum wage from $7.25 to $8.25 in July, $9 in July 2014 and $10 in July 2015. The minimum wage for employees who rely on tips would also rise to 70 percent of the minimum wage from 50 percent.

Garagiola said about 20 senators have agreed to co-sponsor the bill, more than in 2011. Braveboy added that at least 40 delegates have pledged support.

“I’m optimistic about its chances,” she said. “We have a number of small businesses on our side.”

The Restaurant Association of Maryland’s government affairs committee and Maryland Chamber of Commerce are among the business groups that have raised concerns about raising labor costs when health care costs and others are increasing.